KYLE BASS: The Japanese Politician Everyone Is Excited About Is Going To 'Detonate' A Bomb On The Economy

Japan is about to "detonate" a "debt bomb" and will be forced to massively devalue its currency, Kyle Bass says. Bass, of course, is massively bearish on Japan, having bet (incorrectly so far) on a fiscal crisis.

"In the next 12 to 18 months, I think you're going to see a move in their rates. Basically Japan is entering its final 'checkmate' phase of the chess game."

Japan is already running a -$100 billion trade balance, Bass says, and the country's GDP has been hit by Chinese boycott stemming from the Diayou/Senkuku islands dispute.

"You have a secular decline in the population happening, you have a balance of trade that's literally being rewritten and falling off a cliff and their GDP is now tracking -3.5, -4 percent.

Bass sees December's election as a foregone conclusion that will dangerously exacerbate the situation.

"We think Abe's a shoo-in. And he said he's going to do everything possible to get to 3 percent inflation. He doesn't even know what he wishes for, because if he gets there, he detonates his debt bomb. "

But Bass argues the Bank of Japan's independence has been "usurped."

"When there's a press release put on the BOJ's website from the MOF [ministry of finance], the BOJ and the government — that's analogous to Bernanke, Geithner and Hillary Clinton issuing a joint press release saying 'we're going to end deflation'. This is how it begins to happen"

He concludes

"Their backs are against the wall. They have a full crisis. They absolutely have to change the manner in which they deal with their currency."